SPRINGFIELD - Gov. Rod Blagojevich's plan to sell the state's student loan debt is drawing scorn from lawmakers on both sides of the aisle.
Though Republicans have been more vocal in their questioning of the plan, which was first unveiled last year, Democratic state Sen. Rickey Hendon of Chicago acknowledged during a hearing Thursday that he too is not on board.
"I'm not quite sure it's the right way to go," said Hendon.
The criticism comes as the governor and legislative leaders are poised to begin negotiating a budget agreement in hopes of adjourning in early April.
As one part of his $55.3 billion budget package, the Democratic governor wants to sell part of the state-held student loan portfolio to private lenders as a way to fund a $90 million tuition tax credit program designed to benefit middle-income families.
Last year, his budget office put the value of the sale at $500 million, but the governor now says the plan could generate about $100 million.
Lawmakers are worried that a private vendor seeking a profit would drive up interest rates and fees for students.
"Once we turn it over to the private sector, they're not going to be concerned as I am," said state Sen. Kirk Dillard, R-Hinsdale.
State Rep. Raymond Poe, R-Springfield, added that the sale would be a one-time infusion of cash, which would create a funding shortfall next year.
"Down the road, this isn't a cure-all," said Poe.
The Illinois Student Assistance Commission manages the portfolio and could sell off some assets without legislative input.
In November, the governor began quietly replacing members of the commission, triggering accusations from Republicans that he was stacking the panel with appointees favorable to the loan sale.
On Thursday, three of the new members were confirmed by the Senate, but not before lawmakers grilled them about the loan sale.
New members Lynda Andre of Edwardsville and David Vaught of Naperville said they did not have enough information about the situation to comment.
New member Sharon Taylor Alpi of Decatur said "I have no hidden agenda."
State Sen. Kirk Dillard, R-Hinsdale, urged the appointees to speak up if they later have qualms about the proposal.
"That's all I ask of you," Dillard said.
In the House, lawmakers called on Southern Illinois University President Glenn Poshard to explain his support of the loan sale.
"I really have some reservations with which way we are headed on this," said state Rep. Rich Brauer, R-Petersburg.
Poshard, who joined other state university presidents in signing a letter backing the governor's higher education proposal, said the added money will help the university boost faculty and staff salaries. But, he said it won't stave off a tuition hike.
That triggered concern from lawmakers, who said the cost of attending the state's public universities could soon be out of reach for some students.
"I worry about this also," said Poshard.
Universities agreed to support the loan sale as part of an overall package of higher education initiatives designed to give the institutions an overall 1.4 percent boost in spending - the first overall increase in three years.